Monday, April 28, 2014

Anglo American posts record met coal output for First Quarter

Anglo American had a record quarter for metallurgical coal output in January-March on improved underground operations in Australia.

Export metallurgical coal production increased 31% year-on-year and 28% quarter-on-quarter to 6.1 million tonnes in the first quarter of 2014, the miner said on Thursday April 24.

Production soared as longwall cutting hours at Grasstree and Moranbah mines in Australia improved by 63% and 33%, respectively.

The Grosvenor coking coal project in Queensland is nearly 50% complete, with longwall production on track to start at the end of 2016 and within the $1.95 billion budget, Anglo American said.

The miner maintains its previous production guidance for export metallurgical coal at 18-20 million tones for the full year in 2014.

Friday, April 25, 2014

NWR settles Q2 average coking coal price 6% lower at $117 per tone

Central European coal producer New World Resources has agreed the average price for coking coal deliveries in the second quarter of 2014 at €85 ($117) per tonne ex-works.

The price is 6% below the realized price of €91 ($126) per tonne in the first quarter of this year, NWR said on Thursday April 24.

Anglo American and Nippon Steel & Sumitomo Metals Corp (NSSMC) settled the second-quarter hard coking coal benchmark price late last month at $120 per tonne fob Australia, down from $143 per tonne in the first quarter.

NWR's coking coal deliveries in the April-June period are expected to comprise 47% mid-volatility hard coking coal, 44% semi-soft coking coal and 9% pulverized coal injection (PCI) material.

The Prague-, Warsaw- and London-listed company sold 1.243 million tonnes of coking coal in the first quarter, compared with a reported 1 million tonnes of coking coal sold in the corresponding period last year.

Earlier this week, NWR mining subsidiary OKD said that it will submit a proposal to the Czech state for terms to close its Paskov coking coal unit as the company seeks to improve profitability amid wider cost-cutting plans.

Thursday, April 17, 2014

STEEL vs. ALUMINUM: Automotive Aluminum – The start of an era?

In the USA, Ford is making its 2015 model F-150 pick-up truck not with a steel body, but with one made from aluminum – a move that could have massive implications for the metal's usage.

It was news that will have passed many people by, but for anyone with a stake in the aluminum industry it was a huge, market-changing, earth-shattering development: Ford is making its 2015 model F-150 pick-up truck with aluminum bodywork.

It is not the first aluminum-intensive vehicle to reach the market. The light-weighting benefits of aluminum have already been showcased in cars such as the Audi A8, with its aluminum frame, and the Jaguar XJ, built with an aluminum sheet-intensive monocoque body.

But the Audi A8 is a luxury sedan car of which only about 12,000 were sold last year in Europe and the USA. The XJ is another luxury vehicle, with less than 8,000 units sold in those markets last year.

The Ford F-150, on the other hand, has been the biggest-selling car of any kind in the US market for the past 32 years. Ford's F-series pick-up trucks sold more than 760,000 units in 2013.

"The real revolutionary change that's happening is that aluminum is now moving into high-volume cars," Alcoa CEO Klaus Kleinfeld said in a recent interview at the Yale school of management.

"It's been an accepted, well-working solution for high-end cars for a while. But what we're seeing now is a broad-based transformation from steel to aluminum [in the autos industry]."

Aluminum producers are now predicting that aluminum’s usage in autos will double in just a few years - and it's not just the producers.

"Their numbers are accurate - aluminum sales will more than double in the auto industry over the next few years," industry consultant Mark Bodner said. "Steel cannot catch up with the pace of substitution."

But, why now? Aluminum producers have been extolling its lightweight, ultra-recyclable, no-rust virtues for decades, and yet steel has maintained dominance in car manufacturing.

Kleinfeld pointed to regulations governing fuel consumption levels, as well as rising fuel prices changing attitudes towards more fuel-efficient cars within each class of vehicle.

Aluminum-intensive vehicles cost more to produce than steel cars, but are cheaper to run because of their greater fuel-efficiency, thanks to their lighter weight. As fuel prices rise, the benefits of aluminum come into sharper focus.

"More than 80% of consumers are now willing to pay up for a more fuel-efficient car," Kleinfeld said. "[A consumer] wants, in the segment of large pick-up trucks, the most fuel-efficient pick-up truck. That's what's changing."

But there is a third reason - the development of new aluminum technologies that raise the performance of the metal against steel in areas other than its main strength of light-weighting.

Innovation in alloys
The growth of pure downstream aluminum producers such as Novelis and Sapa has led to a spate of alloying innovation, as companies seek to position themselves as solution providers to their customers.

"These downstream companies diversified their suppliers, and research and development was focused on products, not processes, and customer service improved dramatically," Constellium CEO Pierre Vareille said at a recent Metal Bulletin conference on aluminum alloys and their applications.

"All large, downstream companies, whether integrated or not, are now developing their own proprietary alloys," Veraille added. "These developments are triggered by customer demand. Co-operation with customers is the key to developing new alloys."

In the past, aluminum in cars has been mostly confined to cast parts and extrusions, and mainly toward the high end of the autos spectrum. The emergence of new aluminum sheet alloys is now translating to growth in car body panels too, and to lower-end cars.

And if the aluminum industry itself had had the chance to hand-pick the one vehicle to be the poster boy for the growth of the light metal in the autos market, the Ford F-150 may well have been it.

"If I was an aluminum producer, I would make sure I was all over this one, and I would make sure it was a success," Kevin Moore, president of All Raw Materials Consulting, said at the recent annual meeting of the Aluminum Extruders Council in Miami. "If it does succeed, at this price range, there will be a lot of copycats."

The average amount of aluminum per vehicle will jump to 550-650lb by 2025 from 364lb in 2012, Moore said, adding that aluminum sheet will see the lion's share of that growth.

And all the major producers have been preparing for that. Norsk Hydro, Alcoa, Novelis and Constellium are just some of the names that have expanded or are expanding their auto sheet and parts production, and most have plans to further increase capacity.

But the demand comfortably beats the announced increases in supply. Alcoa announced an expansion at its Tennessee operations even before the completion of its $300 million expansion in Davenport, Iowa. All but a fraction of the future output of both expansions has already been committed to customers, an Alcoa spokesperson said.

Changing perceptions
There are obstacles still, but none that are not diminishing. Aluminum’s lightweight has historically meant that people perceived it as substantially weaker than steel and thus less safe. But innovations, and the subsequent use of aluminum alloys in such demanding applications as space travel and the military are changing those perceptions.

"Space travel would be impossible without aluminum. The defense industry would not be where it is today were it not for high-impact blast shields [made of aluminum] that have saved hundreds of soldiers' lives," Kleinfeld said. "These are the arguments that consumers will see and are seeing."

Now that Ford has brought aluminum intensity to its biggest-selling car, other companies are following suit just as Moore predicted. General Motors, under pressure from US federal fuel efficiency standards as well as its competitor, has said it will produce an aluminum-bodied pick-up truck by late 2018.

As the major auto manufacturers move into high-volume aluminum cars and the aluminum producers increase their output of high-performing alloys to cater to them, 2014 will mark the beginning of a dramatic growth in aluminum usage in automotive that will certainly come at the expense of steel.

Source - Metal Bulletin

Tuesday, April 1, 2014

Seaborne coking coal prices firm despite Chinese market weakness

Expectations of cuts in the Chinese domestic coking coal price kept the seaborne coking coal market fairly quiet on Tuesday April 1.

While no news of Shanxi Coking Coal's price cuts had been heard at the time of writing, some participants were expecting a cut of about 40 Yuan ($6.50) per tone.

Despite the rumored drop in prices, seaborne spot coking coal values showed a slight increase across the board.

Premium hard coking coal index for material sold on a cfr Jing tang basis was calculated at $121.02 per tone on Tuesday, up by $0.38 from prices seen on Monday.

The premium hard coking coal index fob Australia's DBCT port was $110.69, up by $0.1.51 from Monday.

The cfr hard coking coal index stood at $110.92 per tone on Monday, up by $0.37 per tone. The fob value was $99.38 per tone, up by $0.80 per tone.

Some relatively positive market signals were offered by a small pick-up in billet prices and comparatively encouraging economic data.

The price of Tangshan billet rose by another 10 Yuan ($1.62) on Tuesday to 2,920 Yuan ($473) per tone ex-works, inclusive of VAT. This compared with 2,880 Yuan ($467) per tone last Friday.

The purchasing managers' index (PMI) for China's steel industry rebounded for the first time in three months to 44.2 points for March, according to data released by the China Federation of Logistics & Purchasing on Tuesday. This compared with February's reading of 39.9 points.

The country's official PMI for the manufacturing sector stood at 50.3 points in March, up from 50.2 points in the previous month, the National Bureau of Statistics said on the same day.

But buying interest in China for forward cargoes remained low as inventories are high and prices offered at ports are competitive.

Several miners, on the other hand, were heard to be holding off their cargoes in anticipation of a price recovery.

Elsewhere, customers in Europe and Japan have made some enquiries on spot cargoes, seeking to take advantage of current low prices.

The most-traded September coking coal futures contract on the Dalian Commodity Exchange closed at 834 Yuan ($135) per tone on Tuesday, down by 2 Yuan ($0.32) from Monday's close.

The most-traded September coke contract closed at 1,225 Yuan ($198) per tone, up by 5 Yuan ($0.81) compared with the previous close.

The Yuan prices are the equivalent of cfr prices plus 17% VAT and port charges of around 35 Yuan ($6) per tone.